October IMX Overview: Tech And Banks Remain Popular; Energy Gets Sold

Monthly Summary

TD Ameritrade clients increased exposure to equity markets during the October IMX period, with the IMX increasing near record highs to 7.40.

TD Ameritrade clients were once again net buyers, increasing equity market exposure. The period saw minimal volatility, while net buying for the ninth consecutive month helped push the IMX higher by 0.26, or 3.6%. Volatility of the S&P 500 as measured by the CBOE Volatility Index, or VIX, spent most of the month around 10, and increased above 13 only once during the period.

Equity markets continued their upward trend during the October IMX period. The S&P 500, Nasdaq Composite and the Dow Jones Industrial Average all posted gains during the period, with the Dow Jones leading the way, up 4.6%. For the first time ever, the Nasdaq and Dow both crossed large milestones during the period, crossing 6,700 and 23,000, respectively.

The S&P 500 also notched a record of low volatility, going over 242 days without suffering a peak-to-trough decrease of 3%, the longest streak on record. Equity market gains have followed a strengthening global economy and growing U.S. corporate earnings. At the same time, central bankers around the world have kept interest rates near historic lows.

Trading

Semiconductor companies NVIDIA Corporation NVDA and Micron Technology, Inc. MU were both net buys during the October IMX period. NVDA continued its upward momentum, reaching all-time highs during the period. MU reached a 52-week high following an analyst upgrade.

For the second month in a row, TD Ameritrade clients were also net buyers of Chinese online companies Alibaba Group Holding Ltd BABA and JD.com Inc (ADR) JD. Both companies traded lower late in the October period and were net bought. Mobile payment operator Square Inc. SQ was also net bought after receiving an analyst upgrade and increased price target.

Additional popular names bought include General Electric Company GE, Teva Pharmaceutical Industries Ltd (ADR) TEVA, and Switch Inc. SWCH.

Despite being net buyers, TD Ameritrade clients found some names to sell during the period. Oil and gas companies were net sold, including Exxon Mobile Corporation XOM, BP plc (ADR) BP, ConocoPhillips COP, and Chevron Corporation CVX.

XOM and CVX reported higher than expected earnings, and the sector has traded higher over the past few months. The banks Wells Fargo & Co WFC and Goldman Sachs Group Inc. GS were both net sells. WFC was net sold for the fourth consecutive month after missing on earnings, while GS beat on earnings and announced it is expanding its private-equity investment offerings. Alphabet Inc. GOOG GOOGL was also net sold after it beat on earnings and traded above $1,000 per share for the first time ever.

Additional names sold include Verizon Communications Inc. VZ and Bristol-Meyers Squibb Co BMY.

Inclusion of specific security names in this commentary does not constitute a recommendation from TD Ameritrade to buy, sell, or hold.